GOVERNMENT REGULATION OF THE REPUBLIC OF INDONESIA
No. 34/2002

ON
FOREST ARRANGEMENT AND FORMULATION OF PLANS
FOR THE MANAGEMENT OF FORESTS, EXPLOITATION OF FORESTS AND USE OF FOREST AREAS

THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

Considering :

that in the framework of implementing the provisions in Chapters V; VII and XV of Law No. 41/1999 on forestry affairs, a government regulation on forest arrangement and formulation of plans for the management of forests, exploitation of forests and use of forest areas needs to be issued;

In view of :

DECIDES:

To stipulate :

THE GOVERNMENT REGULATION ON FOREST ARRANGEMENT AND FORMULATION OF PLANS FOR THE MANAGEMENT OF FORESTS, EXPLOITATION OF FORESTS AND USE OF FOREST AREAS.

CHAPTER I
GENERAL PROVISION

Article 1

Referred to in this government regulation as :

Article 2

(1) Forest arrangement and formulation of plans for the management of forests, exploitation of forests and use of forest areas constitute part of activities of forest management.

(2) The activities of forest arrangement and formulation of plans for the management of forests, exploitation of forests and use of forest areas as meant in sub-article (1) are executed in forest territory in the form of units or management units of conservation forests (KPHK), units or management units of protected forests (KPHL) and units or management units of production forests (KPHP).

Article 3

(1) The forest arrangement and formulation of plans for the management of forests , exploitation of forests and use of forest areas as meant in Article 2 become the authority of the government and/or regional governments.

(2) The government can delegate the activities of forest arrangement and formulation of plans for the management of forests, exploitation of forests and use of forest areas as meant in sub-article (1) in certain territory and/or for certain activities to state-owned enterprise (BUMN) operating in the forestry field.

Article 4

(1) In the framework of interests in forestry research, development, education and training, religion and culture, the Minister stipulates forest arrangement and formulation of plans for the management of forests, utilization of forests and use of forest areas with special objectives.

(2) The forest arrangement and formulation of plans for the management of forests, utilization of forests and use of forest areas with special objectives as meant in sub-article (1) for activities of :

(3) The forest arrangement and formulation of plans for the management of forests, utilization of forests and use of forest areas with special objectives as meant in sub-article (2) are stipulated by the Minister.

(4) Provisions on the forest arrangement and formulation of plans for the management of forests, utilization of forests and use of forest areas with special objectives as meant in sub-articles (1) and (2) are regulated by a decree of the Minister.

CHAPTER II
FOREST ARRANGEMENT AND FORMULATION OF PLAN FOR THE MANAGEMENT OF FORESTS

Part One
Forest Arrangement

Paragraph 1
General

Article 5

(1) The forest arrangement as meant in Article 2 is applied to every forest management unit in all forest areas.

(2) The forest areas as meant in sub-article (1) include :

Paragraph 2
Forest Arrangement In Conservation Forests

Article 6

The conservation forests as meant in Article 5 sub-article (2) letter a consist of :

Article 7

(1) Forest arrangement in the areas of natural reserve forests as meant in Article 6 letter a consists of :

(2) The arrangement of natural preserve forests as meant in sub-article 1 letter a contains the following activities :

(3) In addition to the activities as meant in sub-article (2), the arrangement of wildlife reserve forests as meant in sub-article (1) letter b also contains :

Article 8

(1) Forest arrangement in the natural conservation forests as meant in Article 6 letter b consists of :

(2) Forest arrangement in the national park areas as meant in sub-article (1) letter a is applied to every management units, which contains the following activities :

(3) The division of areas into the zones as meant in sub-article (2) letter d consists of :

Article 9

(1) Forest arrangement in the areas of universal forest parks as meant in Article 8 sub-article (1) letter b is applied to every management units, which contains the following activities :

(2) The division of areas into the zones as meant in sub-article (1) letter d consists of :

Article 10

(1) Forest arrangement in the park areas as meant in Article 6 letter c is applied to every management units, which contains the following activities :

(2) The division of areas into the blocks as meant in sub-article (1) letter d consists of :

Article 11

(1) Forest arrangement in the hunting parks as meant in Article 6 letter c is applied to every management units, which contains the following activities :

(2) The division of areas into the blocks as meant in sub-article (1) letter d consists of :

Paragraph 3
Forest Arrangement in Protected Forests

Article 12

(1) Forest arrangement in the protected forests as meant in Article 5 sub-article (2) letter b is applied to every management units, which contains the following activities :

(2) Blocks are divided into the work clusters as meant in sub-article (1) letter d by referring to :

Paragraph 4
Forest Arrangement in Production Forests

Article 13

(1) Forest arrangement in the production forests as meant in Article 5 sub-article (2) letter c contains the following activities :

(2) Blocks are divided into the work clusters as meant in sub-article (1) letter d by referring to :

Part Two
Formulation Of Plan For The Management Of Forests

Article 14

(1) Based on results of forest arrangement in every unit or forest management unit as meant in Article 8 up to Article 13, a plan for the management of forests is formulated by observing aspirations, participation and cultural values of the society as well as the environmental condition.

(2) The plan for the management of forests as meant in paragraph (1) is formulated as follows :

(3) The forest management plan as meant in sub-article (2) contains the planning, organizing, implementation, evaluation, controlling, supervision as the basis of forest management activities.

(4) Guidelines on formulation of the forest management plan as meant in sub-article (2) are regulated by a decree of the Minister.

CHAPTER III

Part One
General

Article 15

(1) The exploitation of forests as meant in Article 2 aims at producing optimal benefit to the welfare of the whole society in a just manner by continuously maintaining the eternity of the forests.

(2) The eternal forest exploitation as meant in sub-article (1) must meet criteria and indicators of eternal forest exploitation.

(3) The criteria and indicators as meant in sub-article (2) covers social, economic and ecological aspects.

(4) The criteria and indicators as meant in sub-article (3) are regulated by a decree of the Minister.

Article 16

The forest exploitation as meant in Article 15 can be done in all forest areas except natural preserve forests, core zones and jungle zone in national parks.

Part Two
Forest Exploitation in Conservation Forests

Article 17

Forest exploitation in conservation forests is regulated in accordance with law in force.

Part Three
Forest Exploitation in Protected Forest

Paragraph 1
General

Article 18

(1) Forest exploitation in protected forest can in the form of :

(2) The utilization of areas as meant in paragraph (1) includes :

(3) The utilization of areas in protected forests, the following matters are prohibited from :

(4) The cultivation business of medicinal herbs, decorative plants and mushroom as meant in sub-article (2) letters a, b and c includes seedling, planting, maintenance, harvesting, security, processing and marketing.

(5) The cultivation business of bee breeding as meant in sub-article (2) letter d includes activities of making of beehives, maintenance, harvesting, security, processing and marketing.

(6) The cultivation business of wild animal breeding as meant in sub--article (2) letter e includes activities of enrichment and/or flourishing of wild animals.

(7) The cultivation business of swallow nests as meant in sub-article 2 letter f includes activities of maintenance, harvesting and security as well as marketing.

Paragraph 3
Utilization of Environmental Services in Protected Forests

Article 20

(1) The utilization of environmental services as meant in Article 18 sub-article (1) letter b is a kind of business using potentials of environmental service without damaging the environment and reducing its main function.

(2) In the utilization business of potentials of environmental services in as meant in sub-article 1 is, the building of facilities and infrastructures that can change landscape is prohibited.

(3) In the utilization of environmental services in protected forests as meant forests as meant in sub-article 1 is, among others, in the form of :

Paragraph 4
Collection of Non-Timber Forest Products In Protected Forests

Article 21

(1) The activities of collection of non-timber forest products in protected forests as meant in Article 18 sub-article (1) letter c can be executed by taking out non-timber forest products already existing naturally without damaging the main function of areas.

(2) The collection of non-timber forest products in protected forests as meant in paragraph (1) Is, among others, in the form of :

(3) The society is prohibited from collecting forest products protected by law.

Paragraph 5
License to Exploit Forests in Protected Forests

Article 22

(1) The activities of utilization of forests in protected forests as meant in Article 18 sub-article (1) are executed through licensing.

(2) The license to exploit forests in protected forests as meant in sub-article (1) consists of :

(3) The license to exploit forests in protected forests cannot be granted in forest areas already burdened by license to exploit forests.

(4) The license to exploit forests in protected forests cannot be handed over without approval of the licenser;

(5) Areas already burdened by license to exploit forests in protected forests cannot be used as guarantee or guaranteed for other party.

Article 23

(1) The validity period of the license to utilize areas in protected forests as meant in Article 22 sub-article (2) letter a is 5 (five) years at the maximum, with the maximal size of 50 (fifty) hectares.

(2) The validity period of the license to utilize environmental services in protected forests as meant in Article 22 sub-article (2) letter b is 10 (ten) years at the maximum, with the maximal size of 1,000 (one thousand) hectares.

(3) The validity period of the license to collect non-timber forest products in protected forests as meant in Article 22 sub-article (3) letter a is one year at the maximum, with the provision the quantity, kind and location is according to those stipulated in the license.

Article 24

(1) The minister can stipulate techniques of treatment of businesses utilizing areas, environmental services and collecting non-timber forest products, which are adjusted to locations and/or kinds of business.

(2) Techniques of treatment of business utilizing the areas as meant in sub-article (1) are stipulated as follows :

(3) Techniques of treatment of business utilizing environmental services as meant in sub-article (1) result in no change in landscape and the environment as well as strive to preserve supporting elements of environmental conservation.

(4) Techniques of treatment of business collecting non-timber forest products as meant in sub-article (1) are regulated as follows :

Part Four
Exploitation of Forests in Production Forests

Paragraph 1
General

Article 25

(1) Exploitation of forests in production forests is implemented by continuously maintaining the conservation and enhancing the principal function.

(2) Exploitation of forests in production forests can the form of :

Paragraph 2
Utilization of Areas in Production Forests

Article 26

(1) The utilization of areas in production forests as meant in Article 25 sub-article (2) letter a is executed to benefit the growth space not disturbing the principal function of areas.

(2) The utilization of areas as meant in paragraph (1) is, among others, in the form of :

(3) Cultivation business of medicinal herbs, decorative plants and food crop in production forests as meant in sub-article (2) letters a, b and c includes seedling, planting, maintenance, harvesting, security, processing and marketing.

(4) The cultivation business of bee breeding in production forests as meant in sub-article (2) letter e includes activities of making of beehives, maintenance, harvesting and security.

(5) The cultivation business of animal breeding in production forests as meant in sub-article (2) letter f includes activities of enrichment and/or flourishing of wild animals in the production forests.

(6) The cultivation business of swallow nests in production forests as meant in sub-article 2 letter g includes activities of maintenance, security and harvesting.

Paragraph 3
Utilization of Environmental Services in Production Forests

Article 27

(1) The utilization of environmental services in production forests as meant in Article 25 sub-article (2) letter b is all kinds of business utilizing potentials of environmental services without damaging landscape and the environment.

(2) The utilization of environmental services in production forests as meant in sub-article 1 is, among others, in the form of :

Paragraph 4
Utilization of Timber and Non-Timber Forest Products in Production Forests

Article 28

Utilization of timber and non-timber forest products in production forests as meant in Article 25 sub-article (2) letters c and d consists of :

Article 29

(1) The business utilizing timber forest products in natural forests as meant in Article 28 letter a includes activities of felling, transporting, Planting, security, processing, and marketing of products.

(2) The business utilizing timber forest products in natural forests only can be executed in forest areas having potential for the implementation of activities of utilization of timber forest product.

(3) Criteria for potential of natural forests which can be utilized as meant in sub-article (2) are stipulated by a decree of the minister.

(4) Areas of natural forests failing to meet criteria for potential eligible for the utilization of timber forest products are rehabilitated.

(5) The utilization of non-timber forest products in natural forests as meant in Article 28 letter a, among others, can be in the form of business utilizing :

(6) Further provisions on business utilizing timber and/or non-timber forests in natural forests as meant in sub-articles (1), (2) and (5) are stipulated by a decree of the minister.

Article 30

(1) The business utilizing timber and/or non-timber forest products in timber estates as meant in Article 28 letter b includes activities of land preparation, seedling, planting, maintenance, security, harvesting or felling of products, processing and marketing.

(2) The business utilizing timber and/or non-timber forest products in timber estates can be in the form of :

(3) The business utilizing forest products in timber estates is executed in vacant land, steppe and/or bushes in production forests.

(4) The further provisions as meant in sub-articles (1) and (2) are regulated by a decree of the minister.

Article 31

In the case of the issuance of license to utilize forests in areas of productions wherein activities of utilization of forest areas are existent, the minister coordinates institutions concerned.

Paragraph 5
Collection of forest products in production forests

Article 32

(1) The collection of timber forest products as meant in Article 25 sub-article (2) letter e aims at fulfilling the need of individuals or public facilities of inhabitants around the forests.

(2) The collection of timber forest products-as meant in Article 25 sub-article (2) letter f is tradable.

(3) The collection of non-timber forest products as meant in Article sub-article (2) is, among others, the collection of rattan, honey, resins, fruits or resins, leafs and plants below the upright.

(4) The collection of non-timber forest products as meant in sub-article (2) which are wild plants and animals is regulated in accordance with laws in force.

(5) The collection of timber forest products and/or non-timber forest products in production forests as meant in Article 25 sub-article 2 letters e and f includes activities of :

(6) The further provisions as meant in sub-articles (1) and (2) are regulated by a decree of the minister.

Paragraph 6
License to Utilize Forests in Production Forests

Article 33

(1) The activities of utilization of forests in production forests as meant in Article 26 sub-article (2) are executed through licensing.

(2) The license to utilize forest in production forests as meant in sub-article (1) consists of :

(3) The business license to utilize timber and non-timber forest products as meant in sub-article (2) letters - and d cannot be issued to areas already burdened by business license to utilize timber and non-timber forest products or license to collect timber forest products.

Article 34

(1) License to utilize forests in production forests cannot be handed over without written approval of the licenser.

(2) License to utilize forests in production forests is not right of ownership of forest areas.

(3) Forest areas already burdened by license to utilize forests in production forests cannot be used as a guarantee or guaranteed to the other party.

(4) Plants resulting from the business license to utilize forest products in timber estates constitute an asset which can be used as collateral as long as the license remains valid.

Article 35

(1) The validity period of the business license to utilize areas in production forests as meant in Article 33 sub-article (2) letter a is 5 (five) years at the maximum with the provision as follows :

(2) The validity period of the business license to utilize environmental services in production forests as meant in Article 33 sub-article (2) letter b is 10 (ten) years at the maximum with the provision as follows :

(3) The validity period of business license to utilize timber forest products as meant in Article 33 sub-article (2) letter c in natural forests in 55 (fifty five) years at the maximum.

(4) The validity period of business license to utilize non-timber forest products as meant in Article 33 sub-article (2) letter d in natural forests in 10 (ten) years at the maximum.

(5) The validity period of business license to utilize forest products as meant in Article 33 sub-article (2) letters c and d in timber estates is 100 (one hundred) years at the maximum.

(6) The validity period of license to collect timber and/or non-timber forest products as meant in Article 33 sub-article (2) letters e and f is one year at the maximum, with the provision that :

a. the maximum volume is 20 (twenty) m3, in the case of timber forest products originating from results of direct felling;

b. the maximum volume is 20 (twenty) tons, in the case of collection of non-timber forest products.

Part Five
Licensing

Paragraph 1
Subject of Licensee

Article 36

(1) Business license to utilize areas can be issued to :

(2) Business license to utilize environmental services can be issued to :

(3) Business license to utilize timber forest products can be issued to :

(4) Business license to utilize non-timber forest products can be issued to :

(5) License to collect timber forest product can be issued to :

(6) License to collect non-timber forest product can be issued to :

Paragraph 2
Licensing authority

Article 37

Business license to utilize areas is issued by :

Article 38

Business license to collect timber and/or non-timber forest areas is issued by :

Article 39

Business license to utilize environmental services is issued by :

Article 40

Business license to utilize non-timber forest products in natural forests :

Article 41

Business license to utilize non-timber forest products in timber estates :

Article 42

Business license to utilize timber forest products in natural forests or business license to utilize timber forest products in timber estate is issued by the minister on the basis of recommendation from the regent/mayor and governor.

Paragraph 3
Procedures and Requirements for Applying for Licenses

Article 43

(1) Business licenses to utilize areas, environmental services, non-timber forest products and licenses to collect timber and non-timber forest products are issued by means of submitting applications.

(2) The applications for licenses as meant in sub-article (1) are regulated as follows :

(3) Business license to utilize timber forest products in natural forests or business licenses to utilize timber forest products in the timber estates as meant in Article 42 are granted through the offering in an auction.

(4) The auction as meant in sub-article (3) is executed by the Minister.

(5) Requirements for applying for the license to utilize forests and auction of utilization of timber forest products as meant in sub-articles (1) and (3) are regulated by a decree of the Minister.

Article 44

The offering in the auction of business licenses to utilize timber forest products as meant in Article 43 sub-article (3) is regulated as follows :

Article 45

In the case of business licenses to utilize forests having their activities changing the landscape and influencing the environment, Environmental Impact Analysis (AMDAL) needs to be executed in accordance with laws in force.

Part Six
Rights and Obligations of Holders of Licenses to Forests

Paragraph 1
Rights of Holders of Licenses

Article 46

(1) Every holder of license to utilize forests is entitled undertake activities in accordance with the issued cense.

(2) In undertaking the activities as meant in sub-article (1); holders of licenses to utilize forests are entitled to obtain benefits from their business output.

Paragraph 2
Obligations of Holders of Licenses to Utilize Forests

Article 47

(1) Every holder of license to utilize forests is obliged :

(2) In addition to the obligations as meant in sub-article (1), holders of business licenses to utilize areas or environmental services are also obliged to pay a Contribution to Business License to Utilize Forests (IIUPH).

(3) In addition to the obligations as meant in sub-articles (1) and (2), State-owned enterprises (BUMN), regional administration-owned enterprises (BUMD) and private-owned enterprises (BUMNS) holding business licenses to utilize environmental services are also obliged to cooperate with local community cooperatives not later than one year after the license is received.

(4) In addition to the obligations as meant in sub-article (1), holders of business licenses to utilize timber forest products in natural forests or timber estates are also obliged :

(5) In addition to the obligations as meant in sub-article (1), holders of business licenses to utilize non-timber forest products are also obliged :

(6) In addition to the obligations as meant in sub-articles (1), (4) and (5), State-owned enterprises (BUMN), regional administration-owned enterprises (BUMD) and private-owned enterprises (BUMNS) holding business licenses to utilize non-timber forest products are also obliged to cooperate with local community cooperatives rot later than one year after the license is received.

(7) The cooperation as meant in sub-articles (5) and (6) can be in the form of :

(8) Holders of business licenses to utilize forest products are obliged to undertake planting in industrial estate with the minimum size of 50% (fifty percent) of the total area of the planted plants on the basis of plant circle and the size of areas not later than 5 (five) years as from the issuance of business licenses to utilize forest products.

Paragraph 3
Contributions to Forest Utilization

Article 48

(1) Contributions to forest utilization constitutes non-tax state revenue originating from forestry resources, consisting of :

(2) The Contribution to Business License to Utilize Forests (IIUPH) as meant in sub-article (1) letter a is subjected to holders of business licenses to utilize forests on the basis of the size of forests granted in the respective licenses.

(3) The Contribution to Business License to Utilize Forests (IIUPH) as meant in sub-article (1) letter a is collected once, when the business licenses to utilize forests are issued.

(4) The Forest Royalty (DR) as meant in sub-article (1) letter b is subjected to holders of business licenses to utilize forests.

(5) The collection of PSDH of timber forest products, oriqinating from natural forests is based on :

(6) The collection of PSDH of timber forest Products originating from timber estate is based on results of cruising (LHC) of trees to be felled.

(7) Every timber forest product and non-timber product originating from license to utilize forest areas or forest areas changing in designation into non-forest areas and burdened by land title is subjected to PSDH and/or DR.

(8) Provisions on the imposition, collection, ,payment, remittance, management, supervision and control over IIUPH, PSDH and DR as meant n sub-article (1) are stipulated by laws in force.

Part Seven
Expiration of Licenses

Article 49

(1) Licenses to utilize forests can expire if :

(2) Comprehensive audit is audited firstly, before the licenses are received again by the licensers as meant in sub-article (1) letter c.

(3) Based on results of the audit as meant in sub-article (2), licensers can accept or accept with conditions or reject the return of the said licenses.

(4) The expiration of the licenses on the basis of the provision as meant in sub-article (1) does not exempt license holders from the obligation :

(5) At the moment of expiration of the licenses as meant in sub-article (1), immovable goods already developed and/or plants already planted in the working areas become the state property.

(6) As result of the expiration of the licenses as meant in sub-article (1), the government and/or regional governments is/are not responsible for liabilities of the license holders to the third party.

Part Eight
Extension of Licenses

Article 50

(1) Business licenses to utilize areas, environmental services, timber forest products and non-timber forest products as well as licenses to collect forest products having the validity period already expiring can be extended.

(2) The validity period of the licenses as meant in sub-article (1) can be extended if the following requirements for extension of the validity period of licenses are fulfilled :

(3) To the applications for extending the validity period of licenses already fulfilling the requirements as meant in sub-article (2), the following provisions apply :

(4) In the case of applications for extending the validity period of business licenses to utilize timber forest products failing to meet the requirements as meant in sub-article (2) letter b, the extension of the business li censes are rejected and their working areas are offered in auction by the Minister.

(5) Procedures and requirements for extending the licenses as meant in sub-article (2) letter b and sub-article (4) are regulated by a decree of the Minister.

Part Nine
Empowerment of Local Communities in and/or around Forests

Article 51

(1) Empowerment of local communities in and/or around forests aims at enhancing institutional capability of communities in utilizing forests.

(2) The enhancement of the institutional capability of the communities as meant in sub-article (1) is facilitated by the government and/or regional governments.

(3) Further provisions as meant in sub-articles (1) and (2) are regulated by a decree of the Minister.

CHAPTER IV
PRIMARY INDUSTRY OF FOREST PRODUCTS

Part One
General

Article 52

(1) The primary industry of forest products aims at :

(2) The primary industry of forest products consists of :

(3) The licensed capacity of primary industry of timber forest products does not exceed the supporting power of forest eternally.

(4) Raw materials of primary industry of timber forest products can originate from natural forests, timber estates, title forests and plantation products in the form of wood.

Article 53

Regulation, fostering and development of primary industry of forest products aim at :

Article 54

(1) The authority to regulate, foster and develop primary industry of forest products regulated by the Minister include industries which are :

(2) The authority to regulate, foster and develop forest product industries regulated by the Minister in charge of industrial affairs includes all industries other than those mentioned in sub-article (1).

(3) In order to maintain conservation of forest resources and continuous supply of raw materials, the development of pulp and paper industries is obliged to build timber estates.

(4) In addition to the obligation as meant in sub-article (3), holders of business licenses to operate pulp and paper industries can cooperate with holders of business licenses to utilize timber forest products or import raw materials for fulfilling raw materials of the pulp and paper industries.

Article 55

(1) Industrial business licenses and licenses to expand primary industry of timber and non-timber forest products can be granted to :

(2) Industrial business licenses of timber sewing with a production capacity of up to 2,000 (two thousand) cubic meters per annum can be granted to :

(3) Industrial registry number of small-scale primary industry of non-timber forest products can be granted to :

(4) Provisions on criteria for the primary industry of forest products as meant in sub-articles (1), (2) and (3) are stipulated by a decree of the Minister.

Part Two
Licensing of Primary Industry of Forest Products

Article 56

The establishment or expansion of primary industry of timber forest products is obliged to have industrial business license or licenses to expand primary industry of forest products.

Article 57

(1) Industrial business licenses and licenses to expand primary industry of timber forest products apply as long as the relevant industry operates in accordance with the provisions in this government regulation.

(2) Primary industry of timber forest products is evaluated at least every 3 (three) years.

(3) Criteria and procedures for the evaluation of primary industry of timber forest products are regulated by a decree of the Minister.

Part Three
Procedures and Requirements for Applications
for Business Licenses of Primary Industry of Timber Forest Products

Article 58

(1) Applications for business licenses of primary industry of timber forest products and expansion license of :

(2) Requirements far applications for business licenses of the timber forest-product primary industries and expansion licenses as meant in sub-article (1) letters a, b and c are regulated by a decree of the Minister.

Article 59

(1) Applications for business licenses of the timber forest product primary industries and expansion licenses as meant in Article 58 sub-article (1) letters a, b and c must be accompanied by a guarantee for continuous supply of wood raw materials.

(2) Provisions on the guarantee for continuous supply of wood raw materials as meant in sub-article (1) are regulated by a decree of the Minister.

Part Four
Licensing of Primary Industry of Non-timber Forest Products

Article 60

(1) Small-scale primary industry of non-timber forest products is obliged to have industrial registry numbers treated as industrial business licenses.

(2) The establishment or expansion of medium- and large scale primary industry of non-timber forest products are obliged to have industrial business licenses or expansion licenses.

(3) Further provisions on business licenses of the primary industry of non-timber forest products as meant in sub-articles (1) and (2) are regulated by a decree of the Minister.

Article 61

(1) Industrial registry numbers of small-scale primary industry of non-timber forest products, industrial business licenses and expansion licenses of primary industry of non-timber forest products apply as long as the relevant industries operate in accordance with the provisions in this government regulation.

(2) The performance of primary industry of non-timber forest products is evaluated every 3 (three) years.

(3) Guidelines on the evaluation of performance of the primary industry of non-timber forest products as meant in sub-article (2) are regulated by a decree of the Minister.

Part Five
Procedures and Requirements for Applications for
Industrial Business Licenses of Primary Industry of
Non-timber Forest Products

Article 62

(1) Applications for industrial registry numbers of primary small-scale industry of non-timber forest products, industrial business licenses of primary industry of non-timber forest products and expansion licenses are submitted to governors with a copy made available to the Minister and regents/mayors.

(2) Requirements for industrial registry numbers of primary small-scale industry of non-timber forest products, industrial business licenses of primary industry of non-timber forest products and expansion licenses are regulated by a decree of the Minister.

Article 63

Applications for the industrial registry numbers of primary small-scale industry of non-timber forest products, industrial business licenses of primary industry of non-timber forest products and expansion licenses as meant in Article 62 are accompanied by clarity about the fulfillment and source of raw materials.

Part Six
Authority to Issue Licenses

Article 64

(1) Business licenses of timber sewing industries with a production capacity of up to 6,000 (six thousand) cubic meters per annum and industrial registry numbers of small-, medium- and large-scale primary industries of non-timber forest products are issued by governors by observing recommendations and technical considerations of the institution in charge of forestry affairs in regencies/mayoralties and approval of the Minister.

(2) Business licenses and expansion licenses of primary industry of timber forest products which processes directly logs and/or chip raw materials into chip wood, veneer and plywood, laminating veneer lumber with a production capacity of up to 6,000 (six thousand) cubic meters per annum are issued by governors by observing recommendations and technical considerations of the institution in charge of forestry affairs in regencies/mayoralties and approval of the Minister.

(3) Business licenses and expansion licenses of primary industry of timber forest products which processes directly logs and/or chip raw materials into swan timber, chip wood, veneer and plywood, laminating veneer lumber with a production capacity exceeding 6,000 (six thousand) cubic meters per annum are issued by the Minister by observing considerations of governors.

(4) All business licenses of the forest-product primary industries other than those mentioned in sub-articles (1), (2) and (3) are issued to the Minister in charge of industrial affairs by observing considerations of the Minister and governors.

Part Seven
Rights and Obligations of License Holders

Article 65

Every holder of business license of timber and non-timber forest-product industry is entitled :

Article 66

(1) Holders of business licenses of timber and non-timber forest-product industries are obliged:

(2) Further provisions on the obligations of holders of business licenses of timber and non-timber forest-product industries as meant in sub-article (1) are regulated by a decree of the Minister.

CHAPTER V
TITLE FORESTS

Article 67

(1) Title forests are forests located on land burdened by land title.

(2) The title forests as meant in sub-article (1) are proven by land title.

Article 68

Title forests are utilized by holders of the title.

Article 69

(1) Title forests functioning to conserve and protect are utilized in accordance with laws in force.

(2) The status of the title forests functioning to conserve and protect as meant in sub-article (1) can be changed into forest areas.

(3) In the case of the status of title forests being changed into the forest areas as meant in sub-article (2), the government is obliged to give a compensation to the title holders in accordance with laws in force.

(4) In the case of title forests being functioned as conservation or protection areas, the government can give an incentive to the title holder.

Article 70

(1) Title forests functioning to produce can be utilized for activities producing forest products in accordance with the potential and supporting power of land plot.

(2) The government, provincial governments, regency or city governments are obliged to develop title forest, through institutional development.

Article 71

(1) Guidelines on the utilization of title forests as meant in Article 68 are regulated by a decree of the Minister.

(2) Regency or city governments stipulate technical directives for the utilization of title forests on the basis of the guidelines on the utilization as meant in sub-article (1).

CHAPTER VI
UTILIZATION OF FOREST AREAS

Article 72

(1) The utilization of forest areas aims at regulation the use of part of forest areas selectively for interests of development outside forestry activities without changing their status and functions.

(2) The utilization of forest areas for interests of development outside forestry activities only can be done in :

(3) The utilization of the forest areas as meant in sub-article (2) includes the use of forest areas for :

(4) The utilization of the forest areas for the strategic purposes as meant in sub-article (3) letter a includes activities of :

(5) The utilization of forest areas for the limited public interests as meant in sub-article (3) letter b includes activities of development of :

(6) The utilization of forest areas as meant in sub-articles (4) and (5) is further regulated by a presidential decree.

CHAPTER VII
DISTRIBUTION AND MARKETING OF FOREST PRODUCTS

Article 73

(1) In the framework of protecting state rights to forest products and forest conservation, distribution and marketing of forest products are controlled through administration of forest products.

(2) All forest products originating from state forests are measured and tested by the authorized officer.

(3) Physic of the forest products already measured and tested as meant in sub-article (2) are marked as legality evidence.

Article 74

(1) Forest products originating from title forests are measured and have their kinds stipulated.

(2) The measuring and stipulation of kinds of the forest products as meant in sub-article (1) are done by the authorized officer.

(3) The forest products already measured as meant in paragraph (2) are given a certificate of origin (SKAU) which is issued by the head of village or official of the same level and effective as certificate of legitimacy of forest products.

Article 75

(1) The transport, control or ownership of forest products must be accompanied by document of certificate of legitimacy of forest products issued by the authorized official.

(2) The transport of forest products as meant in sub-article (1) must be in accordance with destination address written in document of certificate of legitimacy of forest products (SKSHH) or document of transport of plants and wild animals (SATS).

(3) In the case of the content of certificate of legitimacy of forest products as meant in sub-article (1) being different from the physical condition of kind, quantity and volume of forest products, the said forest products are declared having no certificate of legitimacy as evidence.

(4) Documents which must be accompanied by the transported, controlled or owned forest products as meant in sub-article (1) are :

(5) SKSHH, SATS or SKAU apply and are used for transport of timber and non-timber forest products and wild animals within the territory of the Republic of Indonesia.

(6) Forms of SKSHH and SATS are printed by printing companies appointed by the Minister.

(7) Further provisions on administration of the forest products as meant in Article 73 sub-article (1) are regulated by a decree of the Minister.

Article 76

Forest products in the form of logs and chip raw materials cannot be exported.

Article 77

(1) The authority to regulate, foster and develop the marketing of timber and non-timber forest products not yet processed to the domestic market and primary industries of forest products as raw materials is on the hand of the Minister.

(2) The authority to regulate, foster and develop the marketing of timber and non-timber forest products not yet processed to the international market is on the hand of the Minister in charge of trading affairs by observing considerations of the Minister.

(3) Provisions on the regulation, fostering and development of the marketing of timber and non-timber forest products as meant in sub-article (1) are stipulated by the Minister.

Article 78

(1) In the case of the transported, controlled or owned forest products being not accompanied by certificate of legitimacy of forest products, the said forest products are declared as illegitimate forest products.

(2) The settlement of the illegitimate forest products as meant in sub-article (1) is processed in accordance with laws in force.

(3) The illegitimate forest products as meant in sub-article (2) are auctioned.

(4) Results of the auction of the illegitimate forest products as meant in sub-article (3), already having permanent legal power, are partly allocated as incentive to parties rendering service for rescuing state assets.

(5) Provisions on the granting of incentive to parties rendering service for rescuing the state assets as meant in sub-articles (3) and (4) are regulated by a joint decree of the Minister and the Minister in charge of financial affairs.

CHAPTER VIII
FOSTERING, CONTROLLING AND SUPERVISION

Part One
General

Article 79

(1) In order to ensure the orderly implementation of forest arrangement and formulation of plans for the arrangement of forests and formulation of plans for the management of forests, exploitation of forests and utilization of forest areas, the Minister is authorized to faster, control and supervise policies of governors and regents/mayors.

(2) The Minister, governors and regents/mayors foster, control and supervise the implementation of plans for the arrangement of forests and formulation of plans for the management of forests, exploitation of forests and utilization of forest areas by the third party.

Part Two
Fostering and Controlling

Article 80

(1) The fostering as meant in Article 79 sub-article (1) includes the provision of :

(2) The provision of the guidance as meant in sub-article (1) letter a is directed to the implementation of forest arrangement and formulation of plans for the management of forests, exploitation of forests and utilization of forest areas by provincial and/or regency/city governments, including accountability, report and evaluation of accountability of performance of governors and regents/mayors.

(3) The provision of the counseling as meant in sub-article (1) letter b is directed to the formulation of procedures and working systems.

(4) The provision of the training as meant in sub-article (1) letter c is directed to apparatus resources.

(5) The provision of the directive as meant in sub-article (1) letter d covers activities of formulation of national plans, programs and activities.

(6) The supervision as meant in sub-article (1) letter e is directed to the implementation of part of forest management activities delegated or entrusted to provincial, regency/city governments.

Article 81

(1) The controlling as meant in Article 79 sub-article (2) includes the following activities :

(2) The monitoring as meant in sub-article (1) letter a is an activity to obtain data and information, policies on the implementation of forest management.

(3) The evaluation as meant in sub-article (1) letter b is an activity to evaluate the success of eternal forest management periodically, which is adjusted to kind of their licenses.

(4) The follow-up as meant in sub-article (1) letter c constitutes the follow up to results of monitoring and evaluation for improving policies and the implementation of forest management.

(5) Provisions on the periodical evaluation of the success of eternal forest management as meant in sub-article (3) are stipulated a decree of the Minister.

Article 82

(1) Results of the controlling executed by regents/mayors and governors as meant in Article 79 sub-article (2) are followed up by the third party.

(2) The third party reports the follow-up to the results of the controlling to regents/mayors and governors.

(3) Regents/mayor and governors report the follow-up to the results of the controlling to the Minister.

Article 83

(1) The follow-up to the results of the controlling can be in the form of :

(2) The warning as meant in sub-article (1) letter a is issued by the Minister, governors and regents/mayors.

(3) The nullification as meant in sub-article (1) letter b which is connected with regional regulations is issued by the Minister of Home Affairs on the basis of recommendation of the Minister.

(4) The nullification as meant in sub-article (1) letter b, which is connected with license to utilize forests is issued by the licenser.

Article 84

Guidelines on the fostering and controlling as meant in Article 79 up to Article 83 are regulated by a decree of the Minister.

Part Three
Supervision

Article 85

Provisions on the supervision as meant in Article 79 sub-article (2) are regulated in a government regulation separately.

CHAPTER IX
ADMINISTRATIVE SANCTION AGAINST HOLDERS OF
LICENSES TO
UTILIZE FORESTS AND BUSINESS LICENSES OF
PRIMARY INDUSTRY OF FOREST PRODUCTS

Part One
General

Article 86

In order to guarantee the status, conservation of forest areas and functions of forests, every holder of license to utilize forests and business license of primary industry of forest products that violates provisions outside the criminal provisions as stipulated in Article 78 of Law No. 4l/1999 on forestry affairs is subjected to an administrative sanction.

Article 87

(1) The administrative sanction as meant in Article 86 is in the form of :

(2) The administrative fine as meant in sub-article (1) letter c constitutes non-tax state revenue (PNBP) remitted to the state cash.

Part Two
Administrative sanction of License to Utilize Forests

Article 88

Holders of business licenses to utilize forest products or licenses to collect forest products are subjected to an administrative sanction in the form of suspension of service for document of SKSHH, unless the relevant licensees make out and convey reports in accordance with the provisions.

Article 89

Holders of business licenses to utilize areas, environmental services, forest products or licenses to collect forest products are subjected to an administrative sanction in the form of suspension of activities in the field, unless the relevant licensees :

Article 90

(1) The administrative sanction in the form of suspension of administrative service and suspension of activities in the field as meant in Article 87 sub-article (1) letters a and b is imposed for a period of one year as from the date of imposition of the sanction.

(2) In the case of the licensees already fulfilling their obligations before the period elapses, the sanction is stopped.

(3) In the case of the licensees failing to meet their obligations after the one-year period elapses, their licenses can be revoked by firstly issuing written warning three times with the respective time intervals of 30 (thirty) working days.

Article 91

(1) Holders of business licenses to utilize timber forest products in natural forests are subjected to an administrative sanction in the form of a fine amounting to :

(2) Holders of business licenses to utilize forest products in timber estate are subjected to an administrative sanction as high as 15 (fifteen) times of PSDH against the volume of timber resulting from the felling which originates from the unlicensed building of corridor.

(3) Holders of licensees to collect timber and non-timber forest products are subjected to an administrative sanction as high as 10% (ten) times of PSDH against the forest products exceeding 5% (five percent) of the volume target by kinds of forest products stipulated in their licenses.

Article 92

(1) Holders of business licenses to utilize areas or business licenses to utilize environmental services are subjected to an administrative sanction in the form of reduction of working areas as high as 20% (twenty percent) of their working areas at the maximum, unless the said licensees :

(2) Holders of business licenses to utilize forest products are subjected to an administrative sanction in the form of reduction of working areas as high as 20% (twenty percent) of their working areas at the maximum, if the said licensees :

(3) The reduction of the working areas as meant in sub articles (1) and (2) is executed after written warning is issued 3 (three) times with the respective time intervals of 30 (thirty) working days.

Article 93

(1) Business licenses to utilize areas, environmental services or business licenses to utilize forest products can be revoked, in the case of the said licensees :

a. not cooperating with cooperatives of communities around the forests;

b. not undertaking concrete businesses in a period of 180 (one hundred and eighty days) as from the date of issuance of the licenses;

c. not paying forestry levies in accordance with laws in force;

d. leaving their working areas and jobs before their licenses expires;

e. handing over their business license to other parties without written approval of the licenser;

f. being subjected to a criminal punishment in accordance with Article 78 of Law No. 41/1999 on forestry affairs.

(2) In addition to the provision as meant in sub-article (1), business licenses to utilize forest products also can be revoked, in the case of the said licensees :

(3) Licenses to collect forest products can be revoked, in the case of the said licensees :

a. not paying forest royalty (PSDH);

b. not collecting products in a period of one month as from the date of issuance of licenses to collect forest products;

c. transferring licenses to collect forest products to other parties without written approval of the licenser;

d. collecting forest products not in accordance with what is mentioned in their licensees; or

e. being subjected to a criminal punishment in accordance with Article 78 of Law No. 41/1999 on forestry affairs.

(4) The revocation of the business licenses to utilize areas, environmental services or business licenses to utilize forest products on the basis of the reasons as meant in sub-article (1) letters a, b, c and d and sub-article (2) is executed after the licenser issues written warning 3 (three) times at the respective time intervals of 30 (thirteen) days.

(5) The revocation of business licenses to utilize areas, environmental services or business licenses to utilize forest areas on the basis of the reasons as meant in sub-article (1) letters e and f is executed without issuing a warning firstly.

(6) The revocation of the licenses to collect forest pro-ducts as meant in sub-article (3) letters a, b and d is executed after the licenser issues written warning 3 (three) times at the respective time intervals of 10 (ten) days.

(7) The revocation of the, licenses to collect forest products on the basis of the reasons as meant in as meant in sub-article (3) letters c and e is executed without issuing a warning firstly.

Part Three
Administrative Sanction Against Holders of
Business Licenses of Primary Industry of Forest Products

Article 94

Holders of business licenses of primary industry of forest products that violate the provisions as stipulated in this government regulation are subjected to an administrative sanction in the form of :

Article 95

(1) The administrative sanction in the form of suspension of industrial business as meant in Article 94 letter a is imposed, unless the said licensees :

(2) The sanction in the form of suspension of industrial business as meant in sub-article (1) is effective until the licensees can fulfill their obligations.

Article 96

(1) The administrative sanction in the form of suspension of service for Certificate of Legitimacy of Forest Products (SKSHH) of industrial business as meant in Article 94 fetter b is imposed, unless the said licensees :

(2) The sanction in the form of suspension of service for Certificate of Legitimacy of Forest Products (SKSHH) as meant in sub-article (1) is effective until the said licensees can fulfill their obligations.

Article 97

(1) The administrative sanction in the form of revocation of industrial business licenses as meant in Article 94 letter c is imposed, in the case of the said licensees :

(2) The revocation of industrial business licenses on the basis of the reasons as meant in sub-article (1) letters a, b, c and e is executed after the. licenser issues written warning 3 (three) times at the respective time intervals of 30 (thirteen) working days.

(3) The revocation of industrial business licenses the licenses to collect forest products on the basis of the reason as meant in as meant in sub-article (1) letter d is executed after the court issues a decision having permanent legal power.

Part Four
Procedures for Imposition of Administrative

Article 98

Procedures for the imposition of administrative sanction an holders of licenses to utilize forests and business licenses of primary industry of forest products as meant ii, Article 87 up to Article 97 are regulated by a decree of the Minister.

CHAPTER X
TRANSITIONAL PROVISIONS

Article 99

With the stipulation of this government regulation :

CHAPTER XI
CLOSING PROVISIONS

Article 100

With the stipulation of this government regulation, Government Regulation No. 6/1999 on forest arrangement and collection of forest products in production forests is declared null and void.

Article 101

With the stipulation of this government regulation, technical directives for Government Regulation No. 6/1999 on forest arrangement and collection of forest pro ducts in production forests remain effective as long as they do not contravene or are not yet revoked or replaced by technical directives on the basis of this government regulation.

Article 102

This government regulation comes into force as from the date of promulgation.

For public cognizance, this government regulation shall be promulgated by placing it in Statute Book of the Republic of Indonesia.

Stipulated in Jakarta
On June 8, 2002

THE PRESIDENT OF THE REPUBLIC OF INDONESIA
sgd
MEGAWATI SOEKARNOPUTRI

Promulgated in Jakarta
On June 8, 2002

THE STATE SECRETARY OF THE REPUBLIC OF INDONESIA
Sgd
BAMBANG KESOWO


Elucidation
on
Government Regulation no. 34/2002
concerning
Forest arrangement and formulation of
plans for the management of forests, exploitation of forests and use of forest areas